Australia spends more than $130 billion each year on health, approximately 9.2% of our GDP. The outcome of this and other investments is that our life expectancy puts us very high on the global “league table”.
But a recent Grattan Institute report has pointed out that health expenditure is one of the major drivers of budget deficits. Growth in health spending above GDP over the past ten years was greater than the growth above GDP of all other spending combined.
There’s growing concern across the community that we will have to ration our health resources. We already do, quite profoundly. But there are areas of waste. The fact that “Australia is paying more than $1.3 billion a year too much” for our national pharmaceutical bill as outlined in another Grattan report means this money could be spent on better care and prevention.
This is particularly true for those with least access to health-care services. As a nation steadfastly (rhetorically at least) committed to justice and egalitarianism, this money could be much more fairly and effectively spent on a national oral health-care program or make a major contribution to the national disability insurance scheme.
It isn’t only the drug bill where we could save billions but also in the area of medical diagnosis and intervention. A recent article in the Medical Journal of Australia outlined some of the 150 potentially low-value health-care practices that doctors could be discouraged to use. Among these are included arthroscopic surgery for knee osteo-arthritis and caesarean sections without a medical reason for it.
Then there are the futile end-of-life treatments on which we spend enormous amounts even though they neither enhance nor prolong life. Elderly patients with poor prognosis cancer should not be spending their last days in intensive care units, receiving “…advanced life support interventions such as endotracheal intubation, feeding tubes and cardiopulmonary resuscitation (CPR).”
There is also the wasted spending on poorly-designed and poorly-researched public education campaigns, such as the Swap it, Don’t Stop it campaign.
But can we spend more wisely and, at the same time, get better outcomes? Although most would happily agree with Benjamin Franklin’s adage that “an ounce of prevention is worth a pound of cure”, we fail to invest in accordance with this saying. In fact, we do exactly the opposite.
There are a few areas where we could be much smarter and, not surprisingly, they are in prevention. As one of the best researchers in epidemiology Geoffrey Rose said, “It is better to be healthy than be ill or dead. That is the beginning and the end of the only real argument for preventative medicine. It is sufficient.”
So where have preventative health’s “best buys” been and what are the some of the others? There are many – tobacco control, road trauma prevention, skin cancer and immunisation to name a few. These have all had great returns on investment, and their aim was not only to prolong life but to enhance its quality.
Skin cancers are among the most costly of cancers, and prevention programs, such as Sun Smart, have been repeatedly shown to be successful (averting more than 100,000 skin cancers between 1988 and 2003 in Victoria alone) and highly cost effective. These programs have a return of $3.60 for every dollar invested.
What simple things could we be doing?
Salt is a major contributor to high blood pressure, which, in turn, is a major cause of strokes and heart attacks. We could reduce salt in our food without really noticing. It’s been estimated that $20 million spent on a national food reformulation campaign to reduce salt would get us the same health improvements as $1.5 billion spent on antihypertensive drugs.
Reducing children’s exposure to junk food advertising would the cheapest and most effective way to reduce obesity. Australian children are currently exposed to extremely powerful, pervasive and “nannying” advertising that is much more powerful than any ads governments have ever been able to produce. This year, summer was brought to us by McDonalds, Joyville by Cadburys and happiness came to us courtesy of Coca Cola. How lucky we are.
According the American Public Health Association, if 10% of US adults began walking regularly, they could avoid $5.6 billion in heart disease costs. Every $1 invested in a child safety seat saves $42 in prevented medical costs, and routine childhood immunisation programs save 33,000 lives.
Listen to those who, besides government, bear the risk of spiralling health care costs – business and the insurance industry. We can learn from the United States where health-care costs are rocketing.
A recent report by MetLife (a very large US Insurance company), talks of a potential health “train wreck” in the near future. It states that this could be mitigated by increases in education, health literacy and prevention, particularly in workplaces. One health and well-being program they describe reduced absenteeism by 80% and saved $1.5 million in salaries.
If Australia is to get better health outcomes at a time of fiscal constraints, it will need to make tough decisions. Surprisingly, many of these decisions won’t cost much and may even raise money (tobacco taxation and reducing salt for instance). Taking heed of Benjamin Franklin and practicing what he preached would be a great start.
This is the fifth part of our series Health Rationing. Stay tuned for more articles in the lead up to the May budget or click on the links below:
Part one: Tough choices: how to rein in Australia’s rising health bill
Part two: Explainer: what is health rationing?
Part three: A conversation that promises savings worth dying for
Part four: Phase out GP consultation fees for a better Medicare